Formulary Submission Process Catches On … Slowly

If drug purchasers are so bullish on what the AMCP format can do for them, why don’t more of them use it?
MargaretAnn Cross
Contributing Editor

In a side-by-side cost analysis with other medications, Altace looks expensive. But for a defined population of high-risk patients with hypertension, this ACE inhibitor may have a leg up on its competitors, says John Watkins, RPh, MPH, the formulary manager at Premera Blue Cross. In debating whether to include Altace on Premera’s formulary, members of the pharmacy and therapeutics committee reviewed a study that shows Altace reduces cardiovascular events in high-risk patients even when they do not have heart failure. They also entered their own data into a spreadsheet from Altace’s manufacturer, Monarch Pharmaceuticals, to determine what effect Altace might have on clinical outcomes and the total cost of care for its members. When both indicators came back favorable, Premera put Altace on the preferred tier of its open formulary.

“This is a good drug to use when you have high-risk heart disease patients, but you wouldn’t give it to everybody who’s 40 years old and walks in your office door with mild uncomplicated high blood pressure,” Watkins says.

As logical as Premera’s evaluation seems, it’s not yet the typical way drugs make it onto a formulary. Many health plans would have stopped after reviewing information on the medication’s safety, efficacy, and acquisition costs.

Use of AMCP format spreads

To make its decision, Premera, based in Mountlake Terrace, Wash., relied on the Academy of Managed Care Pharmacy’s Format for Formulary Submissions, which some health plans are starting to use to request information from drug makers. It is designed to standardize the process of collecting clinical and economic data, make it easier to compare clinical information, and enable the pharmacoeconomic modeling that showed how Altace might improve clinical outcomes and reduce total treatment cost for high-risk patients.

Introduced more than a year ago and updated last month, the AMCP’s format is gaining users. More than a dozen large health plans and pharmacy benefit management companies as well as some state Medicaid agencies and integrated health systems are in various stages of adopting it, says Richard N. Fry, director of programs at the Foundation for Managed Care Pharmacy (FMCP), the AMCP’s research and education arm. The Department of Defense also has begun requesting that drug manufacturers follow the AMCP format when submitting information to its P&T committee.

Yet while the format appears to have widespread support in the industry, many organizations are in the earliest stages of figuring out how to fit the format into their formulary-building process, how to use and interpret the clinical effectiveness information and economic models a format request brings, and whether using the format is the best way to go. Small health plans may never use the format, because of the amount of effort and resources it requires to evaluate the information, says Fry.

Moreover, some drug manufacturers are resisting using the format or are still learning to create the “dossiers” it requires. Pharmaceutical Research and Manufacturers of America, for instance, is just beginning to study the AMCP format and does not have an official policy on its use, but manufacturers have been submitting similar information to Canada, Australia, and other countries for years.

Still growing

With so many potential users — health plans, PBMs, and integrated delivery systems — the number of organizations coming on board will grow slowly but steadily, Fry predicts. The FMCP has trained over 150 managed care pharmacists from more than 100 companies, as well as staff members at several pharmaceutical manufacturers, in how to use the format.

The AMCP format is primarily based on a system, codeveloped by the University of Washington and Regence BlueShield, requiring drug manufacturers to provide an array of information, including detailed product descriptions, such as the way a drug will be used, what problems may arise, and actual or anticipated off-label uses. Also needed are data comparing the drug to other medications; summaries of key published and unpublished clinical studies; costs; and a spreadsheet model for predicting plan-specific outcomes. Reports can run to 100 pages, and between 60 percent and 80 percent of the dossier is clinical information, says Fry.

“We want to base our decisions on evidence rather than just cost,” says Sarah Fryberger, MD, director of the Health Resources Commission of the Office of Oregon Health Policy and Research. Fryberger is leading Oregon’s effort to create a formulary for its fee-for-service Medicaid program. The state based its request-for-information process on the AMCP format and had received 35 dossiers by early October.

Using this approach has made a difference in the way the formulary is coming together, Fryberger says. For example, the state decided that while Lipitor showed solid evidence that it lowers cholesterol, Pfizer did not prove to investigators that Lipitor affects outcomes, she says. The drug was not included in the formulary, though physicians may prescribe any drug to Medicaid patients in Oregon.

“The biggest difference is the pharmacoeconomic evaluation,” says Claudette Knight, PharmD, supervisor of clinical program development at Prescription Solutions, a Costa Mesa, Calif.-based pharmacy and medical management company. “Overall, the process of conducting drug or therapeutic class reviews differs among the health plans, the common theme being clinical evaluation — efficacy, safety, comparison to like drugs. Yet the majority of health plans do not have or utilize pharmacoeconomic information in their drug reviews or have the capability of evaluating pharmacoeconomic analysis.” She adds: “For Prescription Solutions, the change is negligible, as we have routinely incorporated pharmacoeconomic evaluations, conducted by our own outcomes team, into our drug and therapeutic class reviews.”

DOD signs on

Dossiers also are coming into the Department of Defense’s Pharmacoeconomic Center in San Antonio, Texas. The department’s P&T committee voted to begin using the AMCP format in May and had received three dossiers by late September.

“We are already finding it useful,” says Capt. Joseph C. Torkildson, who says that the most positive aspect of the format is that it requires manufacturers to present clinical information on their products in a cohesive document. Previously, when the Pharmacoeconomic Center’s staff members wanted to review a drug for its formulary, they had to search online databases and journals for clinical studies, collect and review marketing materials, and make several requests for additional data from the manufacturer. “It doesn’t do our entire job for us, but it provides in a concise manner much of the information that we would have to go and collect from a lot of different sources,” Torkildson says.

The Department of Defense hasn’t been able to use the economic modeling aspect of the format, however, because its pricing is so different from a civilian health plan. And, because it is a public entity, the department is concerned that companies may be reluctant to provide the DOD with proprietary information, due to uncertainty over whether the DOD could block release of that information under a Freedom of Information Act request.

If such concerns become too time-consuming to take care of, the DOD might reconsider its use of the format, Torkildson says. “It’s not hard work to ask for the dossiers. If the time came that it became a lot more work because of having to deal with some of these potential privacy issues, then we’d be more inclined to do a formal analysis to see if it’s worth the amount of effort that we have to put in.”

Some organizations already have decided that the AMCP format is not the right tool for them. MD Anderson Cancer Center in Houston evaluated the AMCP format along with the formulary procedures of countries with public health care systems. The cancer center opted to create its own process based on other countries’ models, says Becky Arbuckle, director of pharmacoeconomics at MD Anderson. Australia’s guidelines, for example, take a more detailed look at how the use of medications affects the entire society, which is what the cancer center has to do with its “society” of patients, she says.

“We’re looking at how pharmaceuticals fit into the rest of our picture,” she says. “There is some of that with the AMCP guidelines — if you use this product, then maybe you don’t have as many visits to the ER–but most of what the AMCP is doing with cost-effectiveness is comparing a drug with other pharmaceuticals. Also, we’re specifically looking at only cancer patients. It’s not like we are looking at a patient group with any type of illness, as your managed care group might have.”

Proprietary information

The AMCP has tried to address the concerns of users and potential users in its second version of the format, which was presented at the group’s educational conference in October and will be posted on the organization’s Web site, «», and that of the foundation, «». For example, the handling of proprietary information has to be addressed between the drug manufacturers and the organizations to which they are submitting their reports, and that is spelled out in the updated version, says the FMCP’s Fry.

The information requested of drug manufacturers has not changed in the second version, though the contents section is now presented in template form, to make it easier to use, Fry says. The suggested format now requires manufacturers to summarize clinical and economic studies in evidence tables.

The updated version also simplifies and clarifies some of the language used in the format. And the AMCP has added a “response to comments” document, addressing common questions the AMCP has received since the format was introduced.

Some manufacturers, for example, have complained about how health systems are implementing the format and have asked for details on how economic models should be created, says Fry. “We’ve emphasized that the academy is not a standard-setting organization. We can’t tell an AMCP member or anyone else how to use this. We do make recommendations throughout the document, but we’re concerned that some health systems may not be following them. Therefore, the foundation will continue to educate as many users and potential users as our resources will permit.”

The AMCP has added a sample letter that health plans can use to document their unsolicited requests for information from manufacturers. The request enables drug companies to provide information to health plans that they are not allowed to include in marketing materials, such as uses for the medication that have not yet been approved by the FDA. The revised format also includes a confidentiality statement and a sample product monograph, which is a summary of the dossier that health plans typically create to give their P&T committee members. “We’ve also stated that the format process applies not just to drug products but to biopharmaceuticals and vaccines,” says Fry.

As the FMCP moves forward, it is also seeking government funding to evaluate the format’s use in the marketplace. The FMCP plans to work with researchers to track how the format is being adopted by health plans and how the format has changed the information that is submitted to health plans and PBMs by drug manufacturers.

“We know that the information in the dossiers submitted by individual manufacturers has improved dramatically over the last year or so,” says Fry. “We want to be able to document that.”

It’s just a matter of time before the industry will see widespread adoption of the format, says Prescription Solutions’s Knight. “The AMCP has done a good job communicating the concept; now health plans need to do a better job of embracing it. There is still a gap between training and educating health plans about how the format works and those organizations implementing it.”

Time, resources

The reason for the gap, Knight, Fry, and others say, may simply be that switching to the format — and a new way of evaluating drugs for formularies — takes resources and time. Health plans, for example, may have to recruit and train staff needed to evaluate the cost-effectiveness studies and pharmacoeconomic models that the format requests, says Fry.

Premera, which serves more than 1.4 million people in Washington state, Oregon, and Alaska, launched the effort to overhaul its formulary decision-making process in the early months of 2001. “Since then, we have been gradually bringing that into place, training the manufacturers to work with us and training the members of our P&T committee,” Watkins says. “It takes a while. It is about a two-year process to implement the format fully. We’re close to that now.”

Formulary format could benefit physicians

Doctors working with health plans that use the AMCP Format for Formulary Submissions may begin to get more detailed information — and stronger evidence — about how medications affect health outcomes and which patients could benefit most from certain drugs.

Using the format, pharmaceutical companies provide more in-depth clinical and outcomes data to health plans as well as models that show when a medication is most cost-effective — information health plans could pass on to physicians.

“In some cases it may be cost-effective to use an expensive new product in a subpopulation of patients, even though it wouldn’t be cost-effective if you used it globally,” says John Watkins, RPh, MPH, the pharmacy manager in charge of the formulary at Premera Blue Cross, Mountlake Terrace, Wash. That information comes out in the format process, and Premera could advise physicians on who would benefit most from the new medication, Watkins says.

Plus, the format gives Premera better data to back up its formulary decisions overall, enhancing the health plan’s credibility with physicians, he says.

“I have better information to use to make decisions, and we can let physicians know that the drugs in our formulary have been thoroughly evaluated, not just in terms of classical safety and efficacy. We can tell them we’ve looked at real outcomes as much as possible,” Watkins says.

MargaretAnn Cross is a freelance writer based in Ann Arbor, Mich. She specializes in health care.